- The Wall Street Journal reported that Rocket made significant gains in mortgage facilities, but the stock price did not follow.
- The mortgage giant is expanding its Rocket Homes and Rocket Autos platforms ahead of the Fed’s rate hike, along with the purchase of Truebill, an all-in-one financial app.
- In 2020, Rocket ranked sixth in the industry by purchase volume, and the company plans to issue 25% of all US mortgages by 2030.
Detroit Rocket Company, Inc (NYSE: RKT) saw mortgage origination double in 2020, then increase by another third during the fall of 2021. Now, investors are considering the potential impact of interest rate hikes expected this year by the Federal Reserve.
What happened: Rocket has experienced amazing growth over the past two years, with a large portion of the company’s business coming from loan refinancing. According to a report from the Wall Street Journal, about one in 14 US home mortgage loans went through a Rocket launch in 2021.
The company generates most of its purchase loans from its partner channels, and works with companies including Credit Karma and Salesforce.com (NYSE: CRM).
Meanwhile, Rocket’s shares have fallen since it went public in 2020 at $18 a share. The stock is now trading around $14, close to a 52-week low of 13.84.
With the Federal Reserve expected to start raising rates as early as this spring, the mortgage giant is expanding other segments of its business. The company launched Rocket Homes, a listing platform similar to Zillow in 2018, while also developing the Rocket Autos platform that connects car buyers with dealers.
Last month, Rocket bought Truebill, the startup behind an all-in-one financial app designed to help people monitor their budgets each month, by organizing accounts and tracking spending.
What then: Rocket said there were 153 million visitors across its platform in 2020, an increase of 61% in one year. The company’s Rocket Homes listing site is expected to convert additional visitors into customers, while the acquisition of Truebill adds approximately 2.5 million users to the Rocket platforms.
Rocket expects continued growth this decade. In 2020, the mortgage loan provider ranked sixth in the industry by purchase volume, up from 12th in 2014, according to Inside Mortgage Finance. Rocket says it plans to issue 25% of all US mortgages by 2030, nearly three times its current share. Wells Fargo & Co (NYSE: WFC) It was the last single bank to dominate such a large market segment in 2012.
Rocket shares closed at 14.16 on Friday, up 1.03%.
Related link: Rocket Companies Announces Executive Changes, Promotions to Start the New Year
Photo: Courtesy of Maia C on Flickr.
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